Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces that it has further lowered the interest rates on the Gazprombank credit facilities.

The parties agreed to reduce the annual interest rate on the facilities from 9.5% to 8.75% in effect as of December 24, 2010. MTS also restructured the Euro-denominated share of the facilities in the amount of Euro 200 million into Russian rubles with the new interest rate of 8.75% (up from 7% on Euro-denominated facilities).

The final payment is to be executed in February 2015, but the agreement allows for early repayment.

Alexey Kornya, MTS Vice President and Chief Financial Officer for MTS, highlighted, “Amendment of the terms of the outstanding Gazprombank debt facilities is part of the MTS strategy aimed at lowering interest expenses and limiting currency risks. Successful renegotiating of the terms of the credit facilities in 2010, according to our estimates, will reduce our annual interest expenses by $250 million.”

Earlier, in May 2010 MTS announced amendment of the terms of its Gazprombank facilities. Following the amendment, the maturity was extended from 1.5–2.5 years to five years. In addition, the interest rate on the facility in the amount of RUB 6.46 billion was reduced. The new debt repayment schedule stipulates quarterly payments in six equal parts, starting from November 2013.